IPO Candidate Apptio Adds 3 Public-Company Veterans

Business-software startup Apptio is adding three executives with experience at public companies, in another sign the company is aiming toward an initial public offering.

Apptio plans to announce Monday it hired as chief financial officer Sean Boyle, who until recently was head of investor relations at Amazon.com and previously was CFO of an Amazon unit. Ted Kummert, a former executive at Microsoft’s corporate-software group, is joining Apptio as executive vice president of engineering and cloud operations. Apptio also is adding to its board Peter Klein, who recently resigned as Microsoft’s CFO.

“In order for Apptio to get to the next level, we needed to go and get individuals who have seen a significant amount of scale,” Apptio CEO Sunny Gupta said in an interview.

Apptio’s software helps businesses keep tabs on how much they’re spending on technology, and whether they’re getting a financial payoff. Apptio has about 150 customers, most of which are very large companies such as Cisco and Goldman Sachs. Todd Tucker, Apptio’s director of strategic marketing, has said the average annual contract value for the company’s core-transparency software is about $250,000.

Apptio, Bellevue, Wash., has raised $136 million from backers including venture firms Andreessen Horowitz and Greylock, as well as mutual-fund companies Janus Capital and T. Rowe Price. The firm has roughly 400 employees, Tucker said.

In the last year or so, startups that sell services to companies rather than consumers have been generating investment buzz and launching well-performing IPOs, including HR-software firm Workday, tech-security company FireEye and Veeva, a seller of software for pharmaceutical companies.

Apptio’s new hires add to the trappings of a startup on its way to an IPO. Gupta said Apptio doesn’t have a date planned for a public-stock offering, but he said, “at some stage that may be the right milestone for Apptio.”

Some of Apptio’s customers have said the service is useful for companies trying to plan the technology they use for their own employees and for customers. In an interview, Klein said in his discussions with corporate-technology officials and CFOs, “They were trying to find out how do my investments in IT create business value.”

The common thread among the new hires was Madrona Venture Group, one of Apptio’s earliest investors. Kummert, the former Microsoft executive, has been working as a Madrona venture partner this year. Klein and Boyle also were introduced to Apptio by Madrona officials, Gupta said.

Note: An earlier version of this story incorrectly said Bechtel is an Apptio customer. An earlier of this article also noted that the company’s average annual contract value is $250,000. The company subsequently said that number applies only to its core software, and that some customers buy other packages as well.